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Who's Eligible for the Child Tax Credit and What It Means This Tax season

The enhanced child tax credit gives parents a tax refund boost. Find out if you're eligible and how advance payments will affect this year's taxes.

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If you're eligible and didn't opt out, you likely received advance child tax credit payments in 2021. 
Sarah Tew/CNET

This story is part of Taxes 2022, CNET's coverage of the best tax software and everything else you need to get your return filed quickly, accurately and on-time.

Every tax season brings its own new changes and tweaks, and 2022 is no different. One big difference for 2021 tax returns is the expanded child tax credit, which will increase tax refunds for many families this year.

If you have children and are preparing your taxes, you'll need to learn the details of this year's child tax credit in order to file your taxes properly and maximize the size of your tax refund.

This year's enhanced child tax credit resulted from the passage of the American Rescue Act last March. The legislation increased the amount of money credited to families from $2,000 per child to $3,600 for kids under age 6 and $3,000 for children up to age 17 (the prior limit was 16). The change also makes the entire credit refundable, instead of 70%.

The expanded child tax credit also introduced advance monthly payments. Half of the money -- up to $300 per month per child -- was distributed to eligible families who didn't opt out using the IRS Child Tax Credit Portal in 2021.

Most families with children 17 and younger are eligible for the child tax credit. Read on to learn how to find out if you're eligible, how to calculate your tax credit and how advance payments in 2021 will affect your tax refund this year.

Are you eligible for the child tax credit? 

More than 96% of families with children 17 and younger are eligible for the child tax credit. The IRS' interactive eligibility assistant lets families quickly learn if they qualify by answering a few brief questions.

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Your IRS Tax Records page will show the amount of advance child tax credit payments.

IRS.com screenshot

The IRS offers several other online tools for your taxes this year, but the most useful require an online account with the IRS which uses facial recognition via ID.me for registration. Once you're confirmed you'll have access to many of your tax records, including information about your child tax credit and advance payments in 2021.

From the IRS Account Home page, click "View tax records" in the Records section. You'll arrive on a page that shows your most recent tax return, your advance child tax credit payments for 2021 and your stimulus payments (called "economic impact payments") for the year.

Parents who received advance child tax credit payments should have also received IRS Letter 6419 confirming the amount of payments and number of eligible children. You can use the tax records in your online IRS account to confirm that your letter is correct. 

Does my income affect my child tax credit? 

Your adjusted gross income (AGI) can change the amount of your child tax credit. If you earn $75,000 or less filing singly, or $150,000 or less married filing jointly, you will receive the maximum child tax credit -- $3,600 for children age 6 and under, $3,000 for children up to 17.

For every $20 in AGI above those limits, the child tax credit is reduced by $1 until the amount reaches $2,000. The child tax credit stays at $2,000 for single filers earning $107,000-$200,000 and married jointly filers earning $182,000-$400,000. The credit again starts to reduce at the same level above those amounts, resulting in $0 credit for those making $240,000 and above filing singly or $440,000 married filing jointly.

Make the math simple by using CNET's Child Tax Credit Calculator to determine the size of your child tax credit.

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What if I had a new child in 2021?

If you had a new baby in 2021 or brought a new qualifying child into your family, they are definitely eligible to be included in the child tax credit when you file your taxes this year. Add their information to IRS Form 1040 and check the box marked "qualifies for child tax credit." Then include them with your number of qualifying children on IRS form 8812.

One important note: along with being age 17 or younger, children must have valid social security numbers in order to be eligible for the child tax credit.

How do I account for advance payments on my 2021 tax return?

The IRS has published a lengthy explanation on how to manage your advance child tax credit payments when filing your 2021 tax return. We'll break it down to make it simpler:

Those steps will help "reconcile" your child tax credit and get you the remaining half of the money you didn't receive in advance.

If you opted out of advance child tax credit payments, you'll still need to file Form 8812 to claim your credit. You simply won't enter any amount for advance payments on line 14f. You'll receive the total amount of your eligible child tax credit with your 2021 tax refund.

What if I received too much money in advance child tax credit payments?

While unlikely, if your income changed dramatically in 2021 or your family situation changed the number of qualifying children living with you last year, it's possible that the IRS sent you too much money in advance child tax credit payments. So, do you have to pay that money back?

In typical IRS terms, "maybe." It all depends on your AGI and whether you qualify for "repayment protection." Single filers earning $40,000 or less, head-of-household filers earning $50,000 or less, and married jointly filers earning $60,000 or less will not have to repay any additional funds they received via advance child tax credit payments. 

Repayment protection gradually phases out as income rises, up to a maximum of $80,000 for single filers, $100,000 for head of household filers and $120,000 for those married filing jointly. If you earned more than those limits, yes, you have to pay back the full extra amount of advance child tax credit money you received. That doesn't necessarily mean you won't get a refund -- your refund may simply be reduced by that extra child tax credit money.

For those earning between the maximum and minimum amounts for repayment protection, they'll need to pay back a portion of the extra money. The exact percentage of money to be paid back can be calculated using the formula presented in question H7 on the IRA's Reconciling Your Advance Child Tax Credits FAQ.